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Climb signals M&A still a growth option
Distributor shares Q1 numbers that reveal decent organic growth, but CEO doesn’t rule out using acquisitions to grow further
Climb Global Solutions has indicated that M&A remains a key plank in its growth strategy, with the most recent deals contributing to its Q1 numbers.
The distributor shared numbers for the three months ended 31 March, with net sales increasing by 49% to $138m and net income improving by 35% to $3.7m year-on-year.
Gross billings increased 34% to $474.6m, with the distribution segment gross billings rising by 36% to $453.6m and the solutions segment gross billings increasing 2% to $21m.
There were signs the acquisition struck last August for Douglas Stewart Software & Services had also contributed to the numbers having been integrated into the group.
“The momentum from our record 2024 has carried into the first quarter, leading to exceptional growth across all key financial metrics,” said Climb CEO Dale Foster. “Our performance was driven by the execution of our core initiatives and the integration of Douglas Stewart Software & Services into our operating platform.
“We drove organic growth in both the US and Europe, demonstrating our ability to deepen relationships with existing partners while signing new, cutting-edge technologies to our line card across geographies,” he added.
Although there is a clear commitment to organic growth, the firm has been vocal in the past about using M&A to bolster its position, particularly as it pushed deeper into Europe.
Further growth
Foster used his comments accompanying the Q1 numbers to restate a willingness to use acquisitions as a method to achieve further growth. “Looking ahead, we believe that we are well-positioned to continue driving organic growth and further improving operating leverage,” he said. “While still early, we expect the implementation of our new ERP system to drive meaningful efficiencies across our global operations. We also plan to remain active with M&A as we evaluate accretive targets that can enhance our comprehensive offerings and expand our presence in both North America and overseas.”
He added that any M&A activity would be “disciplined” when it came to evaluating opportunities that could support growth.
The first quarter has seen Climb actively extending its supplier partnerships, bringing Uniframe and Darktrace on board in just the past couple of weeks to continue that trend.
Speaking on a webcast, Foster said that during the quarter, the firm evaluated 50 potential supplier partners, but only signed four as it looked to seal relationships with players that would add value to the portfolio.
He said the decision to choose such a select number showed its “commitment to partnering exclusively with the most innovative, strategically aligned technologies in the market”.
In terms of the UK and Ireland, Climb made a move back in 2023 to pick up distributor DataSolutions to cement a foothold in the country to gain an operation that serves both Irish and UK resellers, as well as access to a larger portfolio of suppliers.
A narrative of the second half of 2024 being stronger than the start of last year can be seen elsewhere across the channel. Earlier today, Computacenter shared Q1 numbers that indicated it had been able to build on the momentum it generated in its second half of 2024.
